Question

There is a

0.99880.9988

probability that a randomly selected

2929​-year-old

male lives through the year. A life insurance company charges

​$144144

for insuring that the male will live through the year. If the male does not survive the​ year, the policy pays out

​$90 comma 00090,000

as a death benefit.

a.

From the perspective of the

2929​-year-old

​male, what are the monetary values corresponding to the two events of surviving the year and not​ surviving?

The value corresponding to surviving the year is

​

The value corresponding to not surviving the year is

​

​(Type integers or decimals. Do not​ round.)

b.If the 2929year-old male purchases the​ policy, what is his expected​ value?

c.Can the insurance company expect to make a profit from many such​ policies? Why?

Answer 1